Nevada Democrats Fracture Over Billion-Dollar Film Tax Credit in Special Session
Nevada’s 36th Special Session opened this week after Governor Joe Lombardo (R) called lawmakers back to Carson City to address health, public safety, and jobs issues. Yet the spotlight quickly fell on Assembly Bill 5, the Nevada Studio Infrastructure Jobs and Workforce Training Act, which consumed nearly five hours of debate on the first day alone.
The legislation proposes up to $1.4 billion in transferable tax credits over 15 years to draw major film and media production to the state. The primary beneficiary would be a $400 million production campus in Summerlin developed by Howard Hughes Corp in partnership with Warner Bros. Discovery and Sony Pictures Entertainment. To qualify, companies must invest at least $400 million in capital by 2028, spend a minimum of $1.5 billion operationally across Nevada over the credit period, create thousands of jobs, and establish workforce training programs to grow the state’s entertainment sector.
The measure has ignited a deep rift within the Democratic caucus and Democratic Party-aligned groups, from unions to progressive organizations. It has laid bare tensions between the party’s leadership and its progressive, educator, environmental, and public-sector factions. Sponsors Daniele Monroe-Moreno (D) and Sandra Jauregui (D), with Assembly Speaker Steve Yeager’s (D) full backing, have rallied powerful labor union allies, including the Southern Nevada Building Trades Unions, Nevada Jobs Now!, LIUNA, and other construction and carpenter unions. These Democratic Party-aligned groups champion the bill’s promise of 19,000 construction jobs and $4.5 billion in private investment, framing it as a vital move to diversify Nevada’s tourism-heavy economy.
Opposition is lead by the Nevada State Education Association, Sierra Club, AFSCME, and progressive groups—all Democratic Party allies. At a joint press conference on the morning of the first hearing, these organizations condemned the tax credits as a massive subsidy to out-of-state studios that risks undermining funding for public education, social services, affordable housing, and environmental initiatives. They warn that transferable credits allow corporations to profit without contributing to Nevada’s tax base.
The conflict reflects a broader split within Nevada’s Democratic Party. Sixteen of Nevada’s seventeen rural counties oppose the measure, a sentiment echoed by Assemblymember Selena La Rue Hatch (D), who triggered a 21-21 tie in an effort to derail the bill before it was heard. Leadership ultimately prevailed by securing votes, including Assemblymember Max Carter (D), but the episode revealed deep unease over fiscal priorities and the long-term cost of the credit program.
The divide mirrors national Democratic tensions, where moderates and labor leaders, akin to Andrew Cuomo’s (D) pro-development approach in contrast to Zohran Mamdani’s (D) progressive stance in New York, favor large-scale private investment, while educator and environmental groups emphasize public services. This dynamic echoes Senator Chuck Schumer’s (D) establishment position against Representative Alexandria Ocasio-Cortez’s (D) insurgent wing, with Nevada’s leadership supporting studio subsidies and rural and progressive Democrats advocating for funding schools and social programs. The result in Carson City will highlight broader party divisions as the 2026 midterms approach. As the special session proceeds, Assembly Bill 5 continues to serve as a key point of contention within Nevada’s Democratic coalition.
Stay tuned…
